Booz Allen Hamilton awarded $23.4M engineering services contract by GSA, raising value-for-money questions

Contract Overview

Contract Amount: $23,455,360 ($23.5M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: General Services Administration

Start Date: 2017-09-26

End Date: 2018-10-08

Contract Duration: 377 days

Daily Burn Rate: $62.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $23.5 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Performance period was relatively short (377 days), suggesting a focused scope or interim solution. 4. The engineering services sector is competitive, making a sole-source award notable. 5. No small business set-aside was applied, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: questionable

The $23.4 million award for engineering services to Booz Allen Hamilton by the General Services Administration (GSA) warrants scrutiny due to the sole-source nature of the award. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can lead to higher overall costs if not managed tightly, as the contractor is reimbursed for allowable costs plus a fixed fee. This structure may not represent the best value for taxpayers compared to a fixed-price contract awarded through competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning GSA did not conduct a competitive solicitation. This significantly limits the number of potential bidders and removes the pressure of price discovery that competition provides. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), the lack of competition here raises concerns about whether the government obtained the most favorable pricing and terms possible.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium for these engineering services. Without competing the requirement, there is no assurance that alternative, potentially more cost-effective solutions or providers were considered.

Public Impact

The primary beneficiary is Booz Allen Hamilton, a large government contractor, which received a significant contract award. The services delivered are engineering services, likely supporting federal infrastructure, technology, or operational needs. The contract was awarded to an entity in Maryland, suggesting a potential geographic focus for service delivery or administrative operations. The contract's impact on the workforce is likely through the employment of Booz Allen Hamilton's engineers and technical staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can lead to cost escalations.
Lack of small business participation noted.

Positive Signals

Booz Allen Hamilton is a well-established contractor with a track record in government services.
Engineering services are critical for many government functions.

Sector Analysis

The engineering services sector is a broad category encompassing a wide range of technical expertise, from civil and mechanical engineering to systems and IT engineering. Federal spending in this sector is substantial, supporting everything from infrastructure projects and defense systems to research and development. This contract, classified under NAICS code 541330 (Engineering Services), fits within this large market. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the engineering services, but the $23.4 million value indicates a significant engagement.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in delivering these engineering services were likely limited. For a contract of this size, particularly in the engineering sector, there is often potential for small businesses to provide specialized support, and the lack of a set-aside or subcontracting plan may represent a missed opportunity to foster small business growth within the federal contracting ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service which awarded the contract. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure that costs claimed by the contractor are allowable, allocable, and reasonable. Transparency would depend on GSA's reporting practices and any available contract data, but the sole-source nature limits public insight into the justification and negotiation process.

Related Government Programs

General Services Administration Contracts
Engineering and Technical Services
Cost-Plus Contracts
Sole-Source Procurements

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $23.5 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $23.5 million.

What is the period of performance?

Start: 2017-09-26. End: 2018-10-08.

What specific engineering services were procured under this contract?

The provided data indicates the contract falls under NAICS code 541330, 'Engineering Services.' However, the specific nature of these services is not detailed. Typically, this could range from architectural and design services for federal buildings, systems engineering for IT or defense projects, environmental engineering, or specialized technical consulting. Without further details on the Statement of Work (SOW), it's impossible to ascertain the precise technical domain or the criticality of the services provided. This lack of specificity makes it challenging to assess the necessity of a sole-source award or to benchmark the value effectively.

Can the value of this contract be benchmarked against similar sole-source engineering contracts?

Benchmarking the value of this $23.4 million sole-source contract is challenging due to the inherent limitations of non-competitive awards. True value is best assessed through competitive bidding, where market forces establish a price. For sole-source contracts, comparisons are typically made against historical data for the same or similar services procured competitively, or against industry pricing standards if available. Given that this was a sole-source award to Booz Allen Hamilton, a large incumbent contractor, it is difficult to determine if the pricing reflects a fair market value without access to the contractor's cost proposals and GSA's negotiation rationale. The Cost Plus Fixed Fee structure further complicates direct value comparisons.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract type for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is not. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total expenditure. Effective oversight, stringent cost controls, and clear performance metrics are crucial to mitigate these risks and ensure the government does not overpay for the services rendered. For engineering services, where scope can sometimes evolve, CPFF can offer flexibility but demands vigilant management.

What is Booz Allen Hamilton's track record with GSA and in engineering services?

Booz Allen Hamilton is a major government contractor with extensive experience across various federal agencies, including significant work with the General Services Administration (GSA). They have a well-established presence in providing a wide array of professional and technical services, including engineering, IT, cybersecurity, and management consulting. Their long history and broad capabilities suggest they possess the necessary expertise and capacity to perform complex engineering tasks. However, their status as a large, incumbent contractor also means that sole-source awards to them, while potentially efficient in some contexts, warrant careful review to ensure fair pricing and competition where feasible.

How does this contract compare to overall federal spending on engineering services?

Federal spending on engineering services (NAICS 541330) is substantial, often running into tens of billions of dollars annually across all agencies. This $23.4 million contract represents a relatively small fraction of the total federal expenditure in this category. However, its significance lies in its specific context: a sole-source award to a large prime contractor. While the dollar amount itself may not be extraordinary in the grand scheme of federal procurement, the manner of its award warrants attention. It's one of many contracts contributing to the overall federal investment in engineering capabilities, supporting diverse mission requirements across government.

Were there any justifications provided for the sole-source award, and were they adequate?

The provided data simply states 'NOT COMPETED' (CT: NOT COMPETED), indicating a sole-source award. Standard federal acquisition regulations (like FAR Part 6) outline specific circumstances under which a contract may be awarded without full and open competition. These include, but are not limited to, situations where only one responsible source exists, or for urgent and compelling reasons. Without access to GSA's justification and approval (J&A) document, it is impossible to assess the adequacy of the rationale. A thorough review of the J&A would be necessary to determine if the justification for bypassing competition was valid and properly documented.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: GSCQF0B1733124

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,485,782

Exercised Options: $63,485,782

Current Obligation: $23,455,360

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $671,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline